Key Highlights

  • Net sales rose 12.5% to USD 182.2 million in the quarter ended September 26, 2026, with organic growth of 8.4% and in-ground pool sales up 22.6%.
  • Gross Margin widened by 130 basis points to 36.7%, while adjusted EBITDA climbed 18.1% to USD 45.3 million, a margin of 24.8%.
  • Sand State sales grew 21.1% in the third quarter, led by Florida and Texas, and 16.6% year to date.
  • The board approved a three-year USD 100 million share repurchase plan, and 2026 net sales guidance was narrowed to USD 605 million to USD 615 million.

Third Quarter Sales and Margin Beat the Prior Year

Latham Group (NASDAQ:SWIM) reported third quarter 2026 results on November 3, 2026, for the quarter ended September 26, 2026. Net sales reached USD 182.2 million, up 12.5% from USD 161.9 million a year earlier, and the company said organic growth was 8.4% with the Freedom Pools Acquisition adding the rest. In-ground pool sales rose to USD 92.4 million from USD 75.4 million, while covers gained 8.7% and liners slipped from USD 31.6 million to USD 30.1 million. Gross Profit rose 16.6% to USD 66.8 million, and the company tied the 130 basis point margin gain to better plant absorption on higher volumes and lean manufacturing.

Why Fiberglass and the Sand States Drive the Story

Latham describes itself as the largest designer, manufacturer and marketer of in-ground residential swimming pools in North America, Australia and New Zealand. Management said fiberglass pools are gaining share because of faster installation, cost efficiency and durability, and it expects fiberglass to gain at least one point of Market Share in 2026, reaching about 25% of U.S. in-ground pool sales. The Sand States are a focus, led by Florida and Texas: the company hosted community pool events, added field sales staff in Florida (with more planned for Texas and Arizona) and partnered with a national homebuilder to offer its pools in new Florida homes, with one installed in a model home so far.

Debt Refinancing, Higher Costs and What to Watch

Costs rose faster than sales. Selling, general and administrative expenses increased 25.5% to USD 35.9 million, including USD 3.2 million of earn-out expense tied to the 2024 Coverstar Central deal. Net Income of USD 12.1 million, or USD 0.10 per diluted share, included a one-time USD 5.0 million loss on Debt extinguishment and modification linked to a refinancing of a USD 75 million revolver and a USD 300 million term Loan that extends maturities to 2033. Nine-month net income fell 10.3% to USD 16.3 million. Total debt was USD 292.5 million against cash of USD 94.8 million, and the company said much of the pool building season is behind it, so fourth quarter Volume is a key variable.

Where Things Stand

The jump came from volume, price and acquisition rather than one source: organic growth was 8.4%, in-ground pools grew fastest, and plant absorption lifted margin. Latham Group (NASDAQ:SWIM) also narrowed 2026 guidance to net sales of USD 605 million to USD 615 million and adjusted EBITDA of USD 112 million to USD 118 million, from prior ranges of USD 600 million to USD 620 million and USD 110 million to USD 120 million. Net income for nine months is still lower than a year ago, and the next test is how the Sand State push and the buyback develop through year-end.